Kennedy puts his principles before Illinoisans' pensions

Democratic candidate for governor Chris Kennedy has called for state pension funds to drop their investments in manufacturers of guns and ammunition.

Kennedy knows that the reason state pension funds hold gun manufacturers in their portfolios is because the state’s pension managers have been increasing their investments in index funds, which are funds that, rather than pick and choose stocks, attempt to mimic the performance of the overall market. By their very nature, index funds will hold gun and ammunition manufacturers if those companies are represented in the overall market. To insist that the index funds in which the state invests divest themselves of particular companies is to insist that those index funds abandon their very character — and thus the low costs and elimination of manager risk that have made index funds such an attractive investment.

The state of Illinois has admirably moved more of its pension investments into index funds in an attempt to minimize costs, battle the corruption that has historically plagued investment of state money, and thus provide higher and more predictable returns for pensioners and taxpayers. Kennedy, for political purposes and with the wholehearted support of at least one of his opponents, state Sen. Daniel Biss, is now insisting that the state effectively abandon this sound investment strategy. When investment returns struggle as a result, who will howl the loudest? One suspects the likes of Kennedy and Biss.

By the way … is any of the Kennedy family money that has so generously financed the political ambitions of the scions of the Hyannis aristocrats invested in index funds — and hence in so many of the activities Kennedy deems reprehensible?